Wednesday, November 26, 2008

We do notice that even the Obama Apostles of the MSM are questioning where the hell all this money is going to come from. They just haven't figured out that it's being done on purpose to crash the US financial empire. When they do figure it out, they'll happily report it as progress and then run a news package on the true humanitarians that staff soup kitchens.

I keep watch on the entertainment media as a way to distract myself from the political mess we're embroiled in. I notice films and videogames about zombies are enjoying a renaissance. Since entertainment outlets reflect their times, I'm wondering if future generations will make the assessment that the average American citizen, "Boobus Americanus" (BTW, that phrase was coined by Doug Casey, a man who is epochly smarter than 99% of America) is indeed a thoughtless zombie being led by the nose-hairs by the MSM and told what to feel by the entertainment mediums he adheres to. My colleagues at my place of employ certainly reflect a sort of "zombie subservience" to the prevalent collective thought. Regardless, we'll all be wormfood when the future historians pass judgement on our lame asses.

So dear readers, enjoy your Thanksgiving Feast you worked so hard to provide. Enjoy your family and friends; breaking bread with your fellow man is a sure way to bond with someone. Give thanks for the joys in your life and say a prayer in hope for the future. But mostly, give words of praise to our Founding Fathers who gave us 200+ years the world has never seen better of. Men who set the defining high mark for liberty and freedom. We owe them our endless gratitude.

The last 80 years have been highlighted with the effort to undo what they have done. The Republic is faultering, but still holding onto the greatest mass experiment in freedom the earth has known. Let's hope it holds out awhile longer...........pray it does for your children and grandchildren.

You may have noticed that the posts have been fewer and fewer after the election. While the GOP candidate was horrific, his choice of a VP was hearteneing as she seemed to have a good dose of Reagan Populism running through her veins. Above and beyond that, she seems like a fair and truly decent person with strong values. Now we've always known liberals to be the most hateful bunch of people on the planet; but even Sound Of cannons was shocked at the vitriol that the GOP VP candidate received from the supposedly fair mass media. In fact, it downright disheartened us. She was attacked for her values, her strengths and her beliefs. At a time when America is teetering on the brink of social collapse; "Boobus Americanus" joined the conflagration of media hatred and derided this truly decent person. In turn, they voted in a radical, socialist Muslim who can't seem to prove he was born on American soil. We're still in a state of shock at SOC Towers East and have dramatically increased our alcohol intake in trying to make sense of it.

Much like the Russian populace cheered on Lenin, Stalin and Trotsky after the Bolshevicks had their day and few lived (after the mass genocides) to regret it. Much like the countries of Europe cheered the EU but had to turn to socialism and lament the loss of sovereignty. Much like Chairman Mao was heralded throughout the world and proceeded to rack up more murder than Stalin and Hitler combined. Much like those aforementioned examples, we are going to rue the day we let a true-red socialist into the Oval Office. Since there are no accidents in politics, we assume Barrie is the latest step towards placing America on the level with all the other socialist shitholes on Earth. Massive steps already underway to crash our economy, the next step will be subjugation. oddly enough, it seems like we won't put up much of a fight. The retarded voters of Massachusetts voted to keep their state income tax, quite resoundingly. More and more it seems "Boobus Americanus" likes the idea of being a slave in love with his chains.

{In our distressed state of thought, the editorial board of Sound Of Cannons has decided to limit our postings through the end of 2008. We'll post occaisionally and then ramp it up for calendar 2009. we're reasonably sure that the president-elect will give us plenty to contemplate as he aids in the downfall of the once great American Republic. May God save us and our Founding fathers forgive us. SOC}

TED BUTLER COMMENTARYNovember 4, 2008MORE SIGNS OF A SILVER SHORTAGE(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)The evidence of a wholesale silver shortage continues to build. This is in addition to the current retail shortage. The continuing tightening in the price differentials between the trading months in COMEX futures has continued and become more dramatic.One of the clearest indicators of a shortage in a physical commodity occurs when the nearby futures months trade at a premium to more deferred trading months. That means buyers are willing to pay more for a commodity because it is not immediately available. Remember, the definition of a commodity shortage revolves around delays and premiums. While the nearby months in COMEX silver futures haven’t yet grown to a premium over the more deferred months (called backwardation or an inverted market), they have moved noticeably in that direction.A second sign was the unusual and persistent buying of the recently concluded October COMEX silver futures contract, which recorded almost 1300 contracts delivered (6.5 million ounces) for the month. The bulk of these contracts resulted in a removal of silver from COMEX silver warehouses.Finally, the big silver ETF, SLV, reported a decline of around 4.5 million ounces over a two day period recently. It is impossible to tell whether declines in the metal holdings in the ETFs are due to investor share liquidation or if shareholders are removing metal for other purposes, such as industrial consumption. Looking at the share trading volume and price action for the period corresponding to this drop, I’m inclined to think it was due to removal, rather than liquidation. Recent reports of big inflows by air transport of silver from London to India seem to explain the declines in SLV more than investor liquidation. If I am correct, wholesale silver is a lot tighter than most assume.The draw down in visible silver inventories coincides with a new theory that my mentor and friend, Izzy Friedman, conveyed to me a month ago. Izzy remarked to me then that if visible inventories stopped growing and began to decline, that might signal the silver crunch was at hand. At first, I tended to dismiss his new theory. But, after further contemplating his theory, I concluded he may be on to something.Don’t Be FooledBy Israel Friedman(Israel Friedman is a friend and mentor to Theodore Butler. He has followed silver for many decades. He has written articles for us in the past. Investment Rarities does not necessarily endorse these views.)Sooner or later the COMEX will close their doors for one reason only - they will be considered as only a paper exchange. I write this for those people who intend to take delivery on their futures contracts. Don’t bank on receiving actual silver for your contracts.We have signs that the supply of physical silver is drying up. Investors are buying 1000 oz bars in quantity and the miners and smelters are cutting production. The two US banks were successful to bring low prices on the COMEX by destroying the mining industry, but you the physical investor will benefit from their actions.I was reading a study that said that twenty years from now, due to growing global demand, we will need the equivalent of a new planet to supply us with the resources we will need. Today silver is closer to a shortage situation than ever, only the price doesn’t show it. If you have decided to invest in silver, think big. 1000 oz of silver in the long run will buy you a two bedroom apartment in Trump Towers.My crystal ball tells me that when the users panic, don’t be surprised that the price of silver could double in a week, and we could reach $40 in less than two months, and move quickly to $100, only because there is no silver available.Be careful, those who have certificates from COMEX, don’t deliver your contracts for paper futures contracts no matter how attractive the spreads become. Don’t give real silver for paper obligations. It is not sure if your paper contract will be worth more than the paper it is printed on. Learn that one bird in the hand is worth more than ten birds on the tree. It is better to have 1000 oz in your hand than 10,000 oz in paper futures contracts.It’s time to be very careful. These moderns gangsters are looking for ways to trick you by discouraging you from buying silver or to swindle you out from the silver you already own, by offering you many goodies like backwardation, leasing your silver with high interest rates and many other tricks. The organizations will offer you all the guarantees in the world for your silver, but remember, they can’t do that legitimately because there is less and less silver in the world.Hold your silver close to your heart and remember that the real gold is silver. When the price of silver is equal to the price of gold, then think of profit taking. If you don’t have silver, you won’t be able to take profits.

WHY THE SILVER USERS WILL PANICBy Theodore Butler(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)An integral component of my analysis has been that, as the inevitable shortage of wholesale silver became apparent, the industrial users would panic and attempt to build inventories of physical metal. Faced with prolonged delays of a material that threatened to shut down their production lines, the users would rush to buy enough physical silver to prevent those shut downs. This would provide a bullish price thrust that few comprehend.Recently, I had an experience that may drive home why the silver users will panic and why that will cause the price of silver to explode. About a month ago, I drove home to Florida from Maine. Normally, I take a slightly longer, but more scenic route, than the straight run down I-95. This year, because I was sensitive to reports of gasoline shortages along the route I normally take, I swung over to I-95 further north than I usually do, to avoid any problems getting fuel. It seemed that Hurricane Ike and pipeline problems were causing gas shortages throughout the Southeast U.S.Having navigated successfully over to I-95 (over much pouting and resistance from my wife, a strong proponent for the scenic route), I thought I was headed home gas-worry free. However, at a rest stop in South Carolina, a traveler approached me with the warning that gas was now a problem on I-95. He related to me that he just came from a gas station that was sold out and had heard that there "was no gasoline at all in Georgia." Georgia was still 100 miles ahead, and there is no other way to get to Florida.Since I had less than half a tank of gas, I decided to fill up at the next gas station. Sure enough, that station had long lines and the dreaded plastic bags over many of the fuel nozzles, indicating empty tanks for premium and mid-grade gas. Fortunately, my car only requires regular gas, so I was able to fill up with no great difficulty.I must tell you that such an experience wakes you up and focuses your attention on something you normally take for granted. I confess that 75 miles down the road, in stopping at a hotel for the evening, I pulled into an empty gas station and topped off my tank with 2 gallons. I wanted to get home.It occurred to me that it didn’t matter if your vehicle was worth $1000 or a hundred times that amount; without fuel, it was of no use. You need fuel to run your car. Same thing with silver for an industrial consumer - your $100 million factory could grind to a halt without silver.I related to my wife that the price of a gallon of gas was no longer a concern, only its availability. If there was a way to insure a guaranteed supply of gas for the next year or so, I would sign up. But that’s impossible, as the problem was that there was no practical way of storing such a supply, as we are all limited by the capacity of our vehicles’ fuel tanks. Where would you put 1000 gallons of gasoline?It occurred to me that there was no practical way for anyone to hedge against a shortage of fuel, save build your own tanks to store the fuel. Even those that had successfully hedged the price of fuel in the past, like Southwest Airlines and others, were hedging against just the price and couldn’t guarantee themselves actual supply in a shortage. For fuel and many other commodities, there was no practical protection against a shortage of the commodity.That’s when it dawned on me to write this article. Silver is a lot different than fuel in that not only is it a lot easier and less dangerous to store, it is more likely to go into a shortage, given silver’s investment demand. Not only could the silver industrial consumers hedge themselves against the giant silver price increases ahead (buying futures), they could easily guarantee actual supplies before the coming inevitable shortage. All the users have to do is buy actual silver, not paper contracts, but real silver. Just like you do. The users buying actual silver to protect against both price increases and availability is as easy as falling off a log. Plus, it is a very rational act.The silver industrial users have yet to initiate any type of buying protection program, either with paper contracts or with the actual metal. But, the users are run by people who are human. When they can’t get timely delivery of actual silver, like what has occurred to investors for the past months, they will do what I did in North Carolina; they will top off, and keep topping off. Only they won’t be limited by a 15-gallon gas tank. Because of the physical nature of silver and its ease of storage, the users will be able to buy as much silver as they care to, price permitting. They will buy more silver than they need because they will fear not being able to get it, once the delays in shipments start. This will set off a chain reaction, exacerbating the shortage and causing more silver users to do the same thing. This chain reaction will set off a price spiral that will shock the world.COT UpdateThe most recent Commitment of Traders Report (COT) indicated a market structure that supports a strong move to the upside in silver and gold. While there was no improvement in the latest COT for silver despite strong downside price pressure during the reporting week, I believe that is due to the washed out condition of the market. How much blood (long liquidation) can you get out of a stone?In gold, however, there was a dramatic cleansing of speculative longs and even notable speculative new short selling. This enabled the commercials to buy many gold contracts. I believe gold is now as washed out as silver. In more measurements than not, both the gold and silver market structure is as good as it has been in years. That means low downside and large potential upside.I read an article today in the Idaho Statesman concerning layoffs at a local silver mine, due to the low price of silver. I took the occasion to write the following e-mail to various officials at the CFTC -From: fasttedb@aol.com To: wlukken@cftc.govmdunn@cftc.gov Bcmailto:Chilton@cftc.govjsommers@cftc.govsobie@cftc.govmailto:cryall@cfct.gov Cc: alavik@cftc.gov Sent: Tue Nov 04 05:34:33 2008Subject: silver manipulationWhile you dot i's and cross t's, and look for ways to look the other way, instead of doing what you know you should be doing, here's a tiny sliver of the harm you are causing to innocent bystanders. You are directly responsible for these people losing their jobs and for the pain and stress it is bringing to their families. You should be ashamed of yourselves for allowing this crime in progress to existhttp://www.idahostatesman.com/business/story/559426.htmlTed Butler

My congratulations to the new President elect...Mr. Obama. And at the same time I offer my condolences. I hate to say it, but this poor schmuck has "fall guy" written all over him. However, I wish him the best anyway...not that it will do him any good.

Yes, we did produce a near perfect republic, but will they keep it? Or will they in their enjoyment of plenty, lose the memory of their freedom? Material abundance without character is the surest way to destruction. Indeed, I tremble for my country when I reflect that God is just. - Thomas Jefferson

Revenge of the Left across the worldWhatever the exact result of the US elections tomorrow, we must assume that the whole governing machinery of Washington and the state capitols will soon be hostile to laissez-faire thinking.

By Ambrose Evans-PritchardLast Updated: 11:27AM GMT 04 Nov 2008

It is not just that the Democrats will win a crushing victory in both houses of Congress, perhaps reaching the 60-seat Senate threshold that lets them steam-roll legislation. It is also that the incoming class of 2008 is of a new creed. Many no longer believe – or actively reject – the free trade and free market catechisms.As commentator Markos Moulitsas put it in Newsweek: "The big question is, will Democrats nationwide simply 'win' the night–or will they deliver an electoral drubbing so thorough that it signals the utter rejection of conservative ideology and kills the notion that America is a 'center-right' country?" he said.No matter that statist policies were responsible for this global crisis in the first place. It was Western governments that set interest rates too low for too long, encouraging us all to abuse credit.It was Eastern governments that held down their currencies to pursue mercantilist trade advantage, thereby accumulating vast foreign reserves that had to be recycled. Hence the bond bubble. This is the deformed creature known as Bretton Woods II. Protectionist Democrats are right to complain that the game is rigged. Free trade? Laugh on.But at this point I have given up hoping that we will draw the right conclusions from this crisis. The universal verdict is that capitalism has run amok.In any case the damage caused as credit retrenchment squeezes real industry is likely to be so great that Barack Obama may have to pursue unthinkable policies, just as Franklin Roosevelt had to ditch campaign orthodoxies and go truly radical after his landslide victory in 1932. Indeed, Mr Obama – if he wins – may have to start by nationalizing the US car industry.For those who missed it, I recommend Edward Stourton's BBC interview with Eric Hobsbawm, the doyen of Marxist history."This is the dramatic equivalent of the collapse of the Soviet Union: we now know that an era has ended," said Mr Hobsbawm, still lucid at 91."It is certainly greatest crisis of capitalism since the 1930s. As Marx and Schumpeter foresaw, globalization not only destroys heritage, but is incredibly unstable. It operates through a series of crises."There'll be a much greater role for the state, one way or another. We've already got the state as lender of last resort, we might well return to idea of the state as employer of last resort, which is what it was under FDR. It'll be something which orients, and even directs the private economy," he said.Dismiss this as the wishful thinking of an old Marxist if you want, but I suspect his views may be closer to the truth than the complacent assumptions so prevalent in the City.To those who still think that business can go on as normal now that EU taxpayers have had to rescue the financial system, I can only say: what will happen to London if EU exchange controls are imposed, or if leverage is restricted by draconian laws – as demanded by the German, Dutch, and Nordic Left?Does the UK still have a blocking minority under EU voting rules to stop a blitz of directives that could shut down half the activities of the City – or the 'Casino' as they say in Brussels? I doubt it.Who thinks that the three key Commission posts – single market, competition, and trade – will still be held by free marketeers when the new team comes in next year?In Germany, Oskar Lafontaine's Linke party now has 23pc support in Saarland on a Marxist pledge to nationalize banks and utilities. Needless to say, the Social Democrats (SPD) are shifting hard Left to protect their flank."The rule of the radical market ideology that began with Margaret Thatcher and Ronald Reagan has ended with a loud bang," said Frank-Walter Steinmeier, Germany's foreign minister and SPD candidate for chancellor next year."We need a comprehensive new start, so we can reestablish our society on fresh foundations. People create value, not locusts," he said.France has its own Gaullist version on this, seizing on the crisis to launch the most far-reaching strategy of state intervention since the 1970s."Laissez-faire, c'est fini," said President Nicolas Sarkozy. "We will intervene massively whenever a strategic enterprise needs our money."Such language can now be heard daily across Europe. It can only intensify as the fall-out from the EU's €1.8bn trillion (£1.4 trillion) bank rescue becomes clearer, and as Europe's elites discover that their own banks are the most leveraged in the world and have played their own Wagnerian part in Gotterdammerung.European and UK banks are five times more exposed to emerging markets than US banks. They alone hold the collective time-bomb of $1.6 trillion (£990bn) in hard currency loans to Eastern Europe – now starting to detonate in Hungary, Ukraine, Romania, and even Russia.At some point, Europe's political class will face the awful truth that their own credit bubbles are just as bad – and perhaps worse – than the excesses of US sub-prime property. As that occurs, the shock will move by degrees from revulsion to political rage.Professor Hobsbawm, who spent his youth watching Hitler's rise in Berlin, has a warning for those who think this will help the Left in any recognizable form. "In the 1930s, the net political effect of the Depression was to enormously strengthen the Right," he said.America was the great exception, as it may prove to be again. I for one will take the enlightened "socialism" of Barack Obama any day over the Hegelian broth nearing the boil in Europe.

(There is no enlightened socialism; there is only individual nullifying oppression Ed.~SOC)

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